UAE regulators pledge to punish fraud

Stock market authorities in the Gulf emirate of Dubai have vowed to punish those involved with the fraudulent trading of millions of shares in the UAE's largest Islamic bank.

29 Aug 2005 15:39 GMT

Two investors are suspected of pushing up share prices illegally

Abd Allah al-Turaifi, executive director of the Securities and Commodities Authority, told Dubai-based Al-Arabiya television on Monday that "severe penalties" would be announced on Tuesday.

The director added that all trades involving Dubai Islamic Bank stock on Sunday had been cancelled after 268.23 million shares worth $2.5 billion changed hands.

Most of the trade was done in fake deals by two investors apparently seeking to affect the bank's share price to make a quick profit, according to market authorities.

Permanent ban

"The people who took part in the manipulation or took advantage of the manipulations in the market will be completely stopped from trading in the financial markets," al-Turaifi said.

The ban will affect investors based inside and outside the UAE, as well as the as-yet-unnamed brokerage house that al-Turaifi said "knew directly and very well about the irregularities by these manipulators".

The UAE has two stock exchange markets, one in the oil-rich emirate of Abu Dhabi and another in Dubai. The latter plans to launch an international stock market next month.